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Minister's Directive re LRP II, Conservation First and Support Programs

On June 10, 2016, the Minister of Energy directed (the "Directive") the Independent Electricity System Operator (the "IESO") to expand the scope of the second phase of the Large Renewable Procurement ("LRP II"), previously announced on April 5, 2016 and discussed here.

The Directive instructs the IESO to increase procurement targets for LRP II, introduce new programs under the Conservation First Framework, and reallocate unused funding towards the IESO's Support Programs.

LRP II

Recognizing the increasing contribution of renewables to Ontario's electricity supply mix, the Directive raises the previously set procurement target for LRP II from 930 MW to 980 MW of renewable electricity. The Directive also requires the IESO, through its current consultation process, to explore opportunities for procuring additional generation through technical upgrades and optimizing existing renewable generating assets.

Conservation First Framework

In respect of the Conservation First Framework, the Directive calls for the development of two new Conservation and Demand Management ("CDM") programs, namely (i) a province-wide pay-for-performance program for consumers with multiple locations across several distribution territories and (ii) a province-wide "whole home" CDM pilot program for residential consumers.

The IESO will work with distributors to develop and implement these programs by late 2016. Any reductions achieved through these programs in electricity consumption will count toward CDM targets and requirements for local distribution companies. The IESO is also required, where appropriate, to deliver the programs in coordination with natural gas distributors.

Funding for Support Programs

Finally, the Direction permits the IESO to reallocate $4 million in unspent Support Program funds from 2015 towards the 2016 budget, increasing the total budget to $14 million.

*This article was written with assistance from Meredith McCann, a summer student at Aird & Berlis LLP.

Short Bio

Corrine’s practice is built on her desire to listen, learn, and thoroughly understand the issues at hand.

Corrine Kennedy is a partner and member of A&B’s Corporate/Commercial and Energy Groups. As part of the Energy Team, Corrine advises clients on the negotiation, administration, interpretation and disputes in respect of various kinds of electricity contracts, including power purchase agreements and capacity contracts. Corrine has extensive experience with secured lender financing transactions, restructuring transactions, as well as standby letters of credit, all within the context of the Feed-in Tariff Program and other energy agreements.

Corrine has been involved in a variety of transactions, including several transactions related to requests for proposals and contracts for procurement of electricity generation facilities, power purchase agreements and capacity contracts, as well as the sale of local electricity distribution companies (LDCs). She has also advised LDC clients on the negotiation and development of service provider agreements under the IESO’s Conservation First Framework.

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